On March 5, 2020 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a pharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported financial results for the fourth quarter and full year ended December 31, 2019 and highlighted recent corporate developments (Press release, pSivida, MAR 5, 2020, View Source [SID1234555227]).

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"Q4 2019 was a pivotal quarter for EyePoint as we continued our commercial momentum, serving an increasing number of patients who suffer from ocular diseases and need better treatment options," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "Our commercial launch initiatives for DEXYCU and YUTIQ are driving increased reception and adoption from the ophthalmology community resulting in strong customer demand and sales growth in the fourth quarter for both products. We anticipate that these initiatives coupled with additional access agreements with ambulatory surgery centers and integrated healthcare networks, continued target account penetration and education efforts with key opinion leaders will continue to drive customer demand throughout 2020."

Ms. Lurker continued, "We are very excited about our lead development asset EYP-1901, an anti-VEGF, tyrosine kinase inhibitor (TKI) six-month sustained release potential therapy using our bioerodible Durasert technology targeting wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion. These indications represent large markets with patient populations in need of treatments that require fewer injections and more consistent drug delivery to control their serious eye diseases."

Commercial Performance in Fourth Quarter 2019

DEXYCU (dexamethasone intraocular suspension) 9% for the treatment of post-operative inflammation following ocular surgery

Customer demand, represented as units purchased by ambulatory surgical centers from the Company’s distributors, was up 111% over Q3 with repeat customers representing 98% of Q4 order volume.

Since launch, over 14,000 patients have been treated with DEXYCU.

The Company secured multiple new agreements for expanded access of DEXYCU, including contracts with The Vision Center Network of America, LLC (VCNA) and EyeSouth Partners which collectively perform approximately 115,000 cataract surgeries per year. The Company is actively negotiating agreements with additional group purchasing organizations and networks.

YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg for chronic non-infectious uveitis affecting the posterior segment of the eye

Customer demand, represented as units purchased by physicians from the Company’s distributors, was up 59% over Q3, driven by underlying growth and the permanent and specific J-Code for YUTIQ in effect as of October 1, 2019.

Repeat customers represented 87% of Q4 order volume, and importantly, 42% of the target account list has ordered, including 98% of the treating uveitis specialists, representing solid adoption with continued growth opportunity.

R&D Highlights

In March 2020, the Company announced positive topline 36-month follow-up data from the second Phase 3 trial of YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. This second double-masked, randomized Phase 3 trial of YUTIQ enrolled 153 patients in 15 clinical centers in India, with 101 eyes treated with YUTIQ and 52 eyes receiving sham injections. At 36-months, the recurrence rate in YUTIQ randomized eyes was significantly lower than in sham treated eyes (46.5% vs. 75.0%, respectively; p=0.001). Visual acuity gains or losses of 3-lines or more were both similar between treatment groups. Safety data showed no unanticipated side effects at each follow-up timepoint at 12, 24 and 36-months. These positive results were consistent with the findings from the first Phase 3 study of YUTIQ and provide further validation of its long-term ability to reduce uveitic flares.

In February 2020, the Company signed an exclusive license agreement with Equinox Science, LLC, to develop vorolanib, a TKI targeting vascular endothelial growth factor (VEGF) receptors for the treatment of wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion. Vorolanib is being developed as EYP-1901 utilizing Eyepoint’s bioerodible Durasert technology as a potential 6-month intravitreal sustained release treatment option. The Company recently completed a positive Type B pre-Investigational New Drug (IND) meeting with the U.S. Food and Drug Administration (FDA) clarifying the pathway for a Phase 1 clinical trial that is expected to provide data in the second half of 2021. Under the terms of the agreement, EyePoint made an upfront payment of $1 million and is required to make additional payments upon the achievement of certain developmental and regulatory milestones, as well as the payment of post-commercialization royalties.

Positive retrospective case study data supporting DEXYCU were highlighted in an oral presentation at the 2020 Caribbean Eye Meeting in an oral session entitled, "Drug Delivery: Real-World Experience With Dexamethasone Intraocular Suspension". The ongoing retrospective study is designed to provide large-scale, real-world data on early experiences with DEXYCU from surgeons. Interim results presented are from 154 patients administered DEXYCU with each time point of data based on patient chart data and frequency of measurement by participating physicians. The proportion of patients with complete anterior chamber cell clearing (cell score=0) was 47.5%, 50.0%, 84.1% and 87.5% at postoperative day 1, 8, 14 and 30, respectively. The proportion of patients with no anterior chamber flares (flare score=0), another measurement of inflammation, was 77.7%, 98.5%, 98.8% and 99.1% at postoperative day 1, 8, 14 and 30, respectively. Mean intraocular pressure at postoperative day 1 was 17.6mmHg, with levels decreasing through to postoperative day 30.

Corporate Developments

In February 2020, the Company completed an underwritten public offering of 15,000,000 shares of its common stock at a public offering price of $1.45 per share. The gross proceeds of the offering were $21,750,000, before deducting the underwriting discounts and commissions and other transaction expenses. In addition, underwriters were granted a thirty-day option to purchase up to an additional 2,250,000 shares of common stock at the public offering price, less underwriting discounts and commissions. This offering closed on February 25, 2020.

In January 2020, the Company signed an exclusive license agreement with Ocumension Therapeutics for the development and commercialization of DEXYCU for the treatment of post-operative inflammation following ocular surgery in Mainland China, Hong Kong, Macau and Taiwan. Under the terms of the agreement, EyePoint received an upfront payment of $2 million and is eligible to receive up to an additional $12 million if certain prespecified development, regulatory and commercial sales milestones are achieved by Ocumension, as well as royalties on future product sales. EyePoint maintains worldwide development and commercialization rights outside of the territories licensed to Ocumension.

In November 2019, George O. Elston was appointed Chief Financial Officer and Head of Corporate Development. Mr. Elston brings more than 25 years of diverse financial and senior leadership experience in the biopharmaceutical sector with both global publicly-traded and privately-held organizations. He most recently served as Chief Financial Officer and Head of Corporate Development at Enzyvant Therapeutics and has also held senior executive roles at 2X Oncology, Inc, Juniper Pharmaceuticals, Inc., KBI Biopharma and Optherion, Inc.

Review of Results for Fourth Quarter Ended December 31, 2019

For the three months ended December 31, 2019, total revenue was $8.6 million compared to $2.4 million in the corresponding quarter in 2018. Net product revenue was $7.9 million, with $4.8 million for YUTIQ and $3.1 million for DEXYCU. There was no net product revenue in the corresponding quarter in 2018.

Net revenue from licenses, royalties and collaborations for the three months ended December 31, 2019 totaled $750,000 compared to $2.4 million in the corresponding quarter in 2018. The prior year quarter included $1.7 million from an up-front licensing fee for YUTIQ.

Operating expenses for the three months ended December 31, 2019 increased to 17.6 million from $13.4 million in the prior year period, due primarily to investments in sales and

marketing infrastructure and program costs, and cost of sales related to product revenue. Non-operating expense, net, for the three months ended December 31, 2019 totaled $1.4 million of net interest expense. Net loss for the three months ended December 31, 2019 was 10.4 million, or $0.10 per share, compared to a net loss of $11.6 million, or $0.12 per share, for the prior year quarter.

Review of Results for Full Year Ended December 31, 2019

For the full year ended December 31, 2019, total revenue was $20.4 million compared to $4.6 million in the corresponding period in 2018. Net product revenue was $16.8 million, with $12.0 million for YUTIQ and $4.8 million for DEXYCU. There was no net product revenue in 2018.

Net revenue from licenses, royalties and collaborations for the full year ended December 31, 2019 totaled $3.5 million compared to $4.6 million in the corresponding period in 2018.

Operating expenses for the full year ended December 31, 2019 increased to $68.2 million from $43.6 million in the prior year period, due primarily to investments in sales and marketing infrastructure and program costs, increase in personnel expenses related to senior management additions and the full year impact of prior additions, and cost of sales related to product revenue, partially offset by a decrease in research and development expense. Non-operating expense, net, for the full year ended December 31, 2019 totaled $8.9 million and consisted of $5.1 million of net interest expense and $3.8 million from the loss on extinguishment of debt related to the payoff of the SWK term loan. Net loss for the full year ended December 31, 2019 was $56.8 million, or $0.54 per share, compared to a net loss of $86.1 million, or $1.27 per share, for the prior year period.

Cash and cash equivalents at December 31, 2019 totaled $22.2 million compared to $31.8 million at September 30, 2019.

Financial Outlook

We expect that the Company’s cash and cash equivalents combined with the February 2020 underwritten public offering proceeds and projected cash inflows from anticipated YUTIQ and DEXYCU product sales can fund the Company’s operating plan into 2021.

Fourth Quarter and Full Year 2019 Financial Results Conference Call

Eyepoint Pharmaceuticals will host a conference call and webcast to discuss fourth quarter and full year 2019 financial results on Thursday, March 5, 2020 at 8:30 AM ET. To access the conference call, please dial (877) 312-7507 from the U.S. and Canada or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 7314529. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.